The Conference Board Economics Watch^® European View

Lower oil prices and a weaker euro are having a positive impact on domestic demand and exports for the Euro Area. This positive impact has already translated into stronger GDP growth, as the Euro Area economy expanded by 0.3 percent in the fourth quarter, beating expectations. The outlook for the coming months is only improving moderately, though, as The Conference Board Leading Economic Index^® for the Euro Area grew 0.2 percent in December. Quantitative easing will come into effect next month, and the question remains whether it will be more effective than the recent Japanese monetary easing, which did not prove very effective. The deal between Greece and the Eurogroup that was recently struck means that a “Grexit” has been avoided, but uncertainty over a long-term solution remains.